New Car vs. Used Car?

[Snufkin]

Hello,

I have been reading these forums for about two years, but never posted before. However, I about to make a monumental (for me) purchase, and I am hoping for some good (not too technical) advice.

I have been driving a family car (my family has a very communal sense of property, even among adult children) for the few years that I have been working. The car is 11 years old, in decent shape (Honda), and I am about to purchase my own, so that my 16-year-old brother can practice with this car.

It's definitely time for my to purchase my own car, and I'm excited, but quite nervous about it. I don't make a great deal of money; the only thing I ever spent more than $1000 on a time is travel (backpacking trips to Europe for weeks at a time). This will be my most major purchase ever.

I originally planned to buy a new Hyundai because of the warranty, and I like the idea of not having a lot of car (I work in the city). However, several friends have told me that it would be better to get a used larger/safer car. I do also do some highway driving to visit family on a regular basis, and the idea of driving a 3-door Hyundai next to tractor trailors at 65 mph is a little scary.

Other pluses of buying a used car: it would be cheaper; it won't lock me into a too-small car for the next 5 or 10 years in case of life changes.

The other issue I have to make a decision on is to finance the car or not. I have about $5000 I can spend cash on the car. Financing it is scary to me, but I know I would probably get a better car:money ration on a slightly more expensive car. The advice I've been given it to look for something in the 8-10K range, and finance part of it to "build credit."

I'm looking at Accords, older Civics, possibly the smallest Subaru if I could get a really good deal; open to anything small, safe, and sturdy, really. I would so much rather just live on a train or bus route, but I don't.

So, my question is: Used or New? Finance or not?
Thank you for all and any advice!

[Mrs. Hermit]

If you buy used, you have to ask yourself: How handy are you with car repairs? Or will you have enough to budget for the inevitable repair bills? Older cars can require more upkeep than new cars. The new car's bumper to bumper warranties can be quite a deal if you are not car repair saavy.

[sweetana3]

Dont let those "larger/safer" folks rain on your parade. I have had Civics for probably 20+ years. The one I have now has 180,000 miles and I think we bought it in 1998. I love it. It is fine on the hiway and gets great gas mileage (around 35 MPG). I see more fatal/serious accidents with trucks, SUVs, and vans than Hondas. I think it is a false sense of security and overdriving. If you are driving in snow and ice, I recommend snow tires but that is all we do.

ps: The only one I would not drive is that super tiny Smart Car I see around that looks like it could be punted around by a bicycle.

The Civic will hold most anything because of the drop down back seat.

[kib]

I've said it about a billion times but I love my Matrix. For its size it's amazingly roomy, it's not quite a "tiny car" on the road, and yet it gets over 35 mpg (2004). I would guess I could sell mine privately for about $5,000; if you wanted a little newer or through a dealer of course it would be a bit more, but I definitely would recommend the brand/model.

[Bronxboy]

Snufkin, you are looking at the right size categories of cars.

The Civic, Impreza, or Corolla are quite large enough for most buyers. Most of your choices are quite good; the Mazda 3 and the more recent Ford Focuses are also OK.

I'm not convinced that the size smaller, Aveo, Accent, or Fiesta (Ford), is particularly practical on U.S. (or Canadian) roads. Having recently made a 250 mile day trip in a Hyundai Accent, I found it to be an uncomfortable experience. I enjoyed driving a recent Mazda 3 greatly.

Used car prices are quite high right now because of poor sales in recent years, so many models may not be a good boy. Therefore, you shouldn't eliminate a new car out of hand.

[Snufkin]

Thank you for the advice. Yes, used car prices do seem rather high, I've been wondering about that, thanks.

How handy am I? Not in the least, with mechanical things; and car trouble does really trouble me, because I don't understand it. That is why the new, cheap car with the strong warranty appeals.

I hadn't considered the Matrix or Mazda; though I know people who have Mazdas and love them; so I will check those out. I would not be keen on buying a used Ford, though I do see many of them on the road.

It just seems like a person shouldn't spend most of their time working to pay for 1)a car to get to work and 2)health insurance in case they get sick; but, it I don't have a car, I can't get to work to pay for either of these things . . .

Thanks again!

[catherine]

I have run the gamut of having really cr*ppy cars on their last legs (but at least they were paid for) to full-out 60 month financed brandy-new cars that I've driven off the lot.

If I were in the market for a car now, I would buy, in cash, a car that was about 2-3 years old, very good on gas, and not a whole lot of bells and whistles.

New cars are expensive, no doubt about it. If financing scares you, pay attention to your instincts.
On the other hand, old cars are scary, too. I've had cars that the cops should have stopped me for, when I was commuting 300 miles a week. Not fun.

So, that's why I say, buy a car that someone else has paid most of the depreciation on. A car that's a couple of years old, low mileage, good shape.

I'm still paying on two cars, my own Prius and my husband's Honda Fit. Both are awesome cars, and I'd buy them again, but do I like paying $950 for two car payments? No. In 18 months, I'll be done, and I can't wait.

[Wildflower]

I've not had good luck with used cars. Lots of mechanical problems, breakdowns on the highway, and no warranty. Last 2 vehicles DH and I bought were brand new. The first we drove for well over 15 years with no problems, just regular maintenance. The most recent we bought has a 100,000 mile warranty and we'll be driving it for several years. And I might add these are GM products which have performed wonderfully for us. A good time to buy is when they are bringing the new model year out, but still have plenty of last year's model on the lot to sell. A good way to get a great discount. We saved about $3500 buying a 2007 model in 2008.....the deals are probably even better now!!

[Gardenarian]

I also have had bad luck with used cars, and as soon as I could afford to buy new, I did. My first new car was a Toyota Tercel; very bare bones, it got 42 mpg. I had to get a larger car (one that would take a baby car seat) when dd was born, and I got another Toyota.

I'm sure that even with repairs it would be cheaper to buy used, but I want a car that I can count on and no hassles. I had the cash to buy new; I would not finance a car (unless it was a loan from family or something.)

[razz]

I have been very happy buying a 3 year old good used car with under 75,000km and keeping for 10 years. The money I saved was amazing. I did do the rust proofing for winter driving each year and spent less than the total original cost of a new car during the 10 years of driving including new tires, brakes, oil changes etc.
It makes no sense to me to buy new. Do the research, find a really good mechanic, look at lots of vehicles and then find one that sounds and looks right for you.

We are fortunate that we have a reseller that has about 600 vehicles and I can test drive any of them to find the one that is a good fit, size, multipurpose car for me.

I ended up with a Vibe that I love, get great mileage, my mechanic is reasonable and conscientious advising when maintenance needs like tires, windshield wipers etc., arise.

[spirit]

Dave Ramsey claims that driving a new car (versus one that's a couple years old) is like throwing a $100-bill out the car window about once a week.

Don't know if it is true but it sure got me to thinking...

[redfox]

I recommend used, no financing, and getting a Toyota ECHO or Yaris. Get one certified from the dealer, or find a top notch mechanic by referral from a friend, and if you go used, get any car you're considering examined by the mechanic.

[JaneV2.0]

I bought a low-mileage used car from a rental agency a couple of years ago. It had 30K miles on it, and now it has 33K. It will be paid off in two months* and my honest neighborhood mechanic thinks it will last forever. I did my homework and didn't have to haggle or get played like a hackysack by a team of car dealership slicksters. I would absolutely do it again. I drove an ancient, unreliable beater for many, many years and will absolutely not do that again. Good luck with whichever car you decide on.

*Bringing my lifetime years of making car payments up to three.

[ApatheticNoMore]

Used. Why? Because I figure if you do your homework you won't spend anywhere near as much on repairs on a used car as the additional price + additional sales tax + more costly insurance + more costly yearly taxes (we have all of these in CA anyway!) will cost you on a new car. In fact I've bought a low mileage used car and haven't spent almost ANYTHING on repairs (oh I needed new tires and stuff, that's are just ordinary maintenance repairs).

What is meant by doing your homework? You need to research the history of the car: http://www.carfax.com/. Make sure the car hasn't been in any accidents at the very least.

And yes you need to take the car to an independent mechanic to have it inspected. If you have a mechanic you trust already that's great, but regardless you need to get the car inspected.

As for big or small cars, well gas prices are going up, you should at least consider the impact of future gas prices. Because I have a feeling those big car people aren't going to be too happy with high gas prices. Actually they always complain about it horribly whenever it happens, like the universe is terribly unfair. :laff: (unless they're doing well enough financially that they don't even feel the effects I guess). Depending on how much you anticipate gas prices going up, this might even lead one to leaning toward a hybrid, although they usually carry a hefty premium.

I've survived an accident that should have hurt if not killed me in a honda without a scratch so I almost consider them lucky for me (and stay brand loyal :)). Really, I just believe I kinda lucked out then though.

You can also read about the safety ratings for cars within a class - (which never entirely makes up for the bulk of a bigger car, but for me I just don't want to spend all my money on gas, worry much about gas prices - which quite frankly are doing all kinds of scary things, nor worry about that much environmental impact when it's bad enough I drive etc., so bulk is not for me). I did very much research the safety ratings for cars within car classes though, plus compared fuel use. Safety ratings, fuel use etc. can be found here: www.edmunds.com

[reader99]

Be aware that in the current recessionary climate there are some situations where a used car can cost MORE than a similar new car. Apparently people just assume used will be cheaper and the demand for 1, 2, 3 year old cars has skyrocketed. My pastor went looking for a slightly used van and ended up buying new because it was less expensive.

I recently went looking for a replacement for my 1998 chevy. I paid $2,000 for it 3 years ago. The $5000 car I test drove, my mechanic said it had every bit as much corrosion (needs new brake lines) as the car I already own. So I paid $400 for new brake lines on my existing car.

I have had great luck with used cars, I'm careful what I buy. Paying a hundred or two for an occasional repair totally beats paying $200-$400 every month without fail. I am starting to feel like when I'm older I won't like the occasional adventure with older used cars and might start wishing for a nearly new one.

[JaneV2.0]

...I am starting to feel like when I'm older I won't like the occasional adventure with older used cars and might start wishing for a nearly new one.

Yeah. I've had all the automotive "adventures" I ever want to have. Wish my local towing company had a frequent-flyer program; I would have cleaned up.

[early morning]

I put some miles on a car - I buy new and keep for 10+ yrs. I'm on new car number 6, true- but two were totaled in their infancy, and one was just a really bad idea and was parted with fairly quickly... :(. Currently, I have a Hyundai Accent. It's 6 yrs old with 165K miles. I love the car. It handles well, gets great mileage (35 MPG average), and has no rust, even with our salt-soaked Ohio winters. I never really used the 100K warranty, because nothing ever broke. Don't dismiss them out of hand. They aren't that small or lightweight, and semi's aren't any scarier in them than any other smallish car I've driven. (DS has a Civic, DD has a Neon, I've had various models of VWs and a Nissan Sentra.) FWIW: The only person I knew personally who was killed by a semi was driving a honking huge pickup.

[RCWRTR]

I have a 2009 VW Jetta SE. It has 2733 miles and I've driven it for 2 years and 2 days since buying it new. I quit working full-time in April 2009, so my car has been driven almost exclusively for personal use. Because I don't drive much, I expect to keep it a long time and wanted a car I would be happy with for 20+ years. You may want to consider how long you are planning to keep the car and check TCO (Total Cost of Ownership), resale value, etc. if these are concerns for you.